No. of Recommendations: 2
How do you feel about the studies that show that people tend to spend a lot more if they use credit cards vs paying cash?

I don't put much faith in those studies. I can tell you that I always spend more when I use a credit card than when I use cash. That's because I only use cash if the expense is less than $10, but for anything over that, I use a credit card. That's for a lot of reasons, not the least of which is that I like to get that cashback bonus, but also that I don't particularly like to carry a lot of cash, and so for expenses over $10, I might not even have that much cash on me and so choose to use my credit card for convenience.

So I choose the way I pay (cash vs. using a credit card) based on how much I have spent, but I don't spend more because I am choosing to use a credit card, so I find those studies to be flawed.

I get a ton of money back from my credit cards every year, and like Ray, we also used our Discover when we were building the house and got a ton back that year. I also used my AMEX to pay for my son's college tuition, and that 1.5% cash back on tuition really added up. I had to use an ACH transfer from my checking account for my daughter's tuition because her school charged a fee to use the credit card, and that was more than the cash bonus I would have seen.


I do find it's easier for me to spend money if it's just plastic versus green pieces of paper.


Since this is your particular behavior, then I agree with you that for you, it works better if you use cash than a credit card. It does not work that way for me, however, and so I am able to take advantage of the cash back bonus, and always pay my bill in full each month.
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